Capital gain account withdrawal

Dear Sir,

Hope you are doing well !!

Withdrawal is a slightly complex process. You cannot withdraw money freely from Capital Gains Account. You need to submit an application. The amount withdrawn should be utilized for intended purpose within 60 days from the date of withdrawal. Depending on the withdrawal amount, a bank may not hand over the amount to you. Bank may issue Banker’s cheque in the name of the seller. The first withdrawal is through Form C and subsequent withdrawals are through Form D. You cannot use this amount for any other purpose except purchase/construction of new property. If you are not able to utilize the withdrawal within 60 days then you should deposit it back in Capital Gain Deposit Account.

You will not get Debit Card/Cheque Book/Net Banking Transfer facility for Capital Gain Deposit Account. There are a lot of other nitty gritty to operate the account. Lastly, to close the Capital Gain Deposit Account, you need the approval of your AO (Assessing Officer). He should be satisfied that you have invested 100% exempted amount to purchase/construct new property. For closure, you need to fill form G. In case of closure of account due to death of the account holder, the legal heirs can claim the deposit through Form H.

Lastly, if the amount not utilized remain in the Capital Gain Deposit Account Scheme even after a specified period of 2/3 years. In short, either taxpayer is not able to finalize the property or provisioned extra amount for property purchase. The 100% of the amount not utilized will be taxed as long term capital for the financial year in which the specific period gets over.

First of all you need to deposit money in Capital gain account scheme when you have earned capital gain income.

Here when you have not completed the transaction why did you deposit the amount in capital gain account scheme.

Now the only way to withdraw amount from the account is to fill Form G and write a letter to AO along with it and when he signs that letter you can withdraw the amount.

It will be difficult as AO wont easily sign the Form G.

Hope you find the information helpful if you do please rate it 5 and provide your valuable feedback for my improvement.

Thank you.

Hi sir

First it is not easy to withdraw amt from bank.

becoZ if u withdraw then within 60 days u need to invest that Amt in other property.

but in ur case since the sales has not been done till now then it was not required by you to deposit the amount in capital gain scheme Becoz only capital gain u earn on sale of property is required to deposit in capital account scheme.

secondly if u want to withdraw the amount then we need to contact to the AO & will try to get the amt withdrawn without paying any tax liability.

If u need any more help in this matter then contact me through phone consultation & I will help u in solving ur problem.

please tell me the branch & the bank in which u deposit the amount so that i can contact there & help u in that.

please rate 5 & provide valuable feedback so that I can improve my answer in future.

- Capital gain account is opened to avail the exemption on the transfer of the capital asset. Why you have deposited advance money? Advance money is taxable if it is forfeited.

- To withdraw money from the capital gain account, you need approval from the jurisdictional AO. Explain the matter to him to get the approval. 

Since the sale is not complete and you havent earned any capital gain you are not required to deposit any amount in capital gain account scheme.

If you had earned capital gain and deposited the amount to save capital gain and was not able to use it in 2/3 years you could use/ withdraw the amount after paying the respective tax.

Hi,

firstly, you were not liable to deposit the money in the bank account since sale did not happen. There is nothing in the act or rules which clarifies this situation. 

you should consult with the bank that what formalities they need.

Most probably, your bank will ask for a permission from your assessing officer and then you need to liasion with the AO

Hello,

Firstly you were not required to deposit the amount in CGAS Account. 

now to withdraw it, you need to ask your bank, they will need a certificate/approval from the jurisdictional AO for the withdrawal of the amount.

I hope this answer satisfies your requirements. 

Regards,

CA Hunny Badlani

LTCG would be leviable whenever the sale is complete.

Currently, you need to hire a local CA to sort this out with the AO and bank.

It is advisable to take a phone consultation for detailed discussion.